Before building a plant anywhere in the world, The Coca-Cola Company conducts a thorough assessment of environmental and occupational safety and health (EOSH) issues, including adequate water supply. In fact, nearly every real estate transaction in the Coca-Cola system begins with an EOSH “due diligence” process consisting of between one and three phases, depending on the outcome of the initial phase.
Our siting standards and guidelines always have required the Company to discuss water and effluent needs with local officials and obtain approvals from the local regulatory bodies.
We have revised these standards to evaluate all infrastructure needs, require watershed specific hydrogeological studies in certain situations and to assess community-wide availability of water resources now and in the future.
Phase One Assessments – General. The Coca-Cola Company requires that Phase One assessments be consistent with the latest version of the American Society for Testing and Material’s Environmental standard (ASTM E 1527-00 and 1528-00) or an equivalent internationally recognized standard. Only qualified, experienced personnel — either within the Company or outside consultants — may conduct Phase One assessments, which must include the following activities:
Reviews of past and present property records, government records and permits, and interviews with anyone having EOSH responsibilities.
Assessments of the property and surrounding area to identify any uses that may have led to soil and/or water contamination.
Evaluations of wetlands and endangered species.
For all transactions involving manufacturing, distribution, laboratory, or R&D facilities or operations, evaluations of compliance with applicable EOSH laws.
Phase One Assessments – Water Requirements. Phase One assessments also include an adequate water requirement. All real estate transactions involving manufacturing or other facilities that require a reliable source and quantity of water must include an evaluation of water supply, both current and future.
Specifically, we require that the assessment consider:
Access to water (both legal right and permit status).
Availability of water (adequate volume in the local area to meet current and forecasted production or other demands).
Source water quality (compared to local standards and Coca-Cola’s requirements).
Social and community considerations, such as the impact of current and forecasted water withdrawals on local water supplies, an evaluation of rainfall and drought trends, and community perception of the Coca-Cola system’s water use in the area.
Phase Two Assessments. Most property assessments do not proceed beyond Phase One. However, if the Phase One assessment indicates a potential contamination issue, outside experts may conduct Phase Two and/or Phase Three assessments after risks are identified and weighed. The due diligence requirements contain 25 examples of circumstances that might prompt a Phase Two assessment, such as:
Evidence of improper disposal, use or storage of large or dangerous amounts of hazardous substances, or waste on the site or in a location near the site.
Evidence that the property has been or is under investigation for environmental contamination.
Evidence of recorded accidents, spills or release of hazardous substances on or near the property that were not adequately remediated or documented.
Evidence that underground storage tanks on site lack appropriate leak detection equipment or have not passed integrity tests.
Evidence or reliable information showing use of septic systems, cesspools, sumps or dry wells at a site that may have discharged hazardous substances and wastes into these systems.
Evidence or reliable information about unidentified discharges from processes on site, whether on land or in water.
Evidence or reliable information that hazardous substances or wastes may have been released or inadequately contained on the site.
Discharges of suspicious substances into waterways upstream of the site.
In cases where a water availability issue or community concern arises as part of the plant siting process, our requirements call for an initial corrective action plan to be established as part of plant ownership.
Phase Three Assessments. Phase Three assessments, again conducted by outside experts, are more detailed investigations to determine more completely the extent of identified issues, risks and liabilities, as well as the viability of proposed solutions. Typically, our managers would begin Phase Three assessments if, after Phase Two, they still needed more information to make these types of determinations.
Corrective Action Plans. The Coca-Cola Company requires every EOSH issue and risk identified in any assessment phase to be addressed with a corrective action plan. The operating unit’s management must take the following actions: prepare the corrective action plan within 30 days of issuing the due diligence report; designate an individual responsible for implementation; provide an estimated completion date for every recommendation; budget money in the annual business plan; and send quarterly updates to Coca-Cola’s Director of EOSH Governance, Environment and Water Resources.
The Coca-Cola Company’s Environment and Water Resources Department is responsible for implementing corrective action plans for all Company-owned plants. Employees of this department ensure that affected properties are included in the normal EOSH compliance audit. They also provide quarterly updates on corrective action plans to senior management.
For plants in which the Company does not have controlling interest, due diligence is conducted and findings are weighed in the franchise contract valuation process. In these cases, the bottler, and sometimes the local Company business unit, would follow up on the corrective action plan.
